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Audit Slams State on Oversight of Mental Health Funding

California agencies have not properly overseen how mental health funds raised under Proposition 63 have been spent, according to a state audit released Thursday, the Sacramento Bee reports (Rosenhall, Sacramento Bee, 8/16).

Background

Prop. 63 -- also known as the Mental Health Services Act -- has raised nearly $9 billion through a 1% tax on residents with incomes greater than $1 million annually.

About 75% of that funding was slated to provide services to those already diagnosed with severe mental illnesses, 20% of the funding was allocated to prevention and early intervention strategies, and the remaining funds were allocated to cover oversight, administration and innovations.

However, an Associated Press report last year found that tens of millions of dollars generated by Prop. 63 have been allocated to aid residents who have not been diagnosed with a mental illness. The report found that the money has been used to bolster programs such as yoga, art and drama classes, horseback riding, and gardening.

In August 2012, Assembly members Dan Logue (R-Linda) and Brian Nestande (R-Palm Desert) requested that the legislative committee conduct an audit of how California spends the funding.

Findings

The audit found that none of the agencies responsible for oversight of Prop. 63 funds had "undertaken serious efforts" to evaluate the effectiveness of mental health programs receiving the funding (McGreevy, "PolitiCal," Los Angeles Times, 8/15).

According to the audit, state officials failed to:

Conduct program reviews or on-site evaluations of county mental health programs; and

Ensure that counties consistently reported required data about their clients.

In addition, it states that a framework for evaluating county programs was not created until eight years after Prop. 63 was approved (Sacramento Bee, 8/16).

In a letter to Gov. Jerry Brown (D), Howle wrote that the Department of Mental Health and Accountability Commission's "minimal oversight" gives "little current assurance that the funds directed to counties -- almost $7.4 billion from fiscal years 2006-2007 through 2011-2012 -- have been used effectively and appropriately" (Rosenhall, "Capitol Alert," Sacramento Bee, 8/15).

Recommendations

According to the audit, "Assessing and reporting on program effectiveness is ... critical to ensure that only effective programs are continued and that the taxpayers and the public are assured that MHSA funds are put to the best use" (Williams, AP/Contra Costa Times, 8/15).

The audit offers several recommendations for improving oversight of county mental health programs. For example, it directs the state Department of Health Care Services to:

Improve contracts it has with counties to ensure greater oversight;

Conduct on-site reviews; and

More adequately collect data from programs.

The report also recommends that lawmakers pass a measure that would allow the state to withhold Prop. 63 funds from counties that do not report required data (Sacramento Bee, 8/16).

The audit suggested amending contracts with Sacramento, San Bernardino and Santa Clara counties. However, the audit found that Los Angeles County was "generally effective" in using data to determine whether goals were met ("PolitiCal," Los Angeles Times, 8/15).

Reaction

According to the Bee, the counties and state agencies targeted in the audit agreed with the recommendations (Sacramento Bee, 8/16).

In addition, DHCS -- which became responsible for oversight of the state mental health funding in 2012 -- said it already has adopted some of the audit's recommendations and plans to implement others (AP/Contra Costa Times, 8/15).

Steinberg called the audit a "wake-up call to the folks in charge" (Sacramento Bee, 8/16).

In a statement about the audit, Steinberg said the "fair and welcome review echoes the concerns that I have expressed about historic gaps in oversight," adding that the "state must demonstrate the effectiveness of existing programs in an objective and consistent way."

However, he noted that the audit "found no evidence that Proposition 63 funds are being misused, or that prevention and early intervention programs are ineffective" (Steinberg release, 8/15).

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